Analysis of Phishy Pharmacy’s CSR Model
CORPORATE SOCIAL RESPONSIBILITY 5
Analysisof Phishy Pharmacy’s CSR Model
Analysisof Phishy Pharmacy’s CSR Model
Corporatebodies have a responsibility that goes beyond the generation ofprofits and business sustainability. Since they exist within aspecific community, they are always expected to assume some societalresponsibilities that enhance the social status of the community. Inrecent years, business experts have stressed on the need fororganizations to be mindful of the external environments in terms ofthe nature of relationships that t hey build with the surroundingcommunities. The concept is captured in the model called SocialCorporate Responsibility. As such, it describes the nature of anenterprise,the possible impact that the business activity is likely to presentto the community, and the initiatives that the organization is readyto take as a way of compensating the members of the society. Some ofthe common social programs include sponsoring sports and educationprograms, investing in the healthcare of the community, controllinghazards brought about by the pollution, conserving the environment byplanting trees, and others. In this regard, corporate entities have adegree of responsibility towards the people and environments that aredirectly affected by their organizational responsibilities.
PhishyPharmaceuticals introduced a weight loss pill called LoseIt Fasttothe marketbefore reports reached the company that the pill was defective and itwas causing serious side effects that were not anticipated by theproduction team. The management decided to oblige the sales team toinitiate a product recall scheme but that was after the accountantcarried out a financial analysis of the recall to determine the costthat would be incurred. Subsequently, the accountant advised themanagement against recalling the new release on grounds that it wouldbe extremely expensive to the business and its shareholders. Herecommended that the management focuses on curing the side effects ofcustomers since it is unlikely that they will file a suit.
Asthe CEO of PhilshyPharmaceuticals, I would take the business risk of initiating aproduct recall since it would have very serious long-term effectswith regards to the reputation of the brand and future revenue (InPalmer, 2015). Though the management does not want to recall theweight loss pill and base their decisions on a set of assumptions,such as the fact that consumers do not expect weight pills to bedefective, thus none will launch a legal suit, it is taking a bigrisk that could lead to huge penalties by the court and FDA (sincethey have not approved the LoseIt Fastpill).
Thoughmy duty as a corporate manager is to maximize profits, it would beutterly wrong to leave the products on the shelves without thinkingabout its health impact to customers. Businesses are supposed toconduct themselves with morality and that is why they construct theirown code of ethics to guide them in this process (In Palmer, 2015).The company should avoid passing the buck to the consumers and acceptits manufacturing mistake and consequential loss.
Themodel of CSR obliges businesses to place the welfare of thesurrounding community first since that is where they source theirworkforce and potential customers (In Palmer, 2015). Consequently, itapplies to the products and services that they supply to them. Thereshould be safety and durability while manufacturing products andquality systems are present to ensure that sub-standard goods are notreleased to the public (In Palmer, 2015).To ensure that they honor their social pledges and responsibilities,the government always audits the CSR models of companies and givesthem a performance score.
Fromthe Phishy Pharmaceuticals case study, it is clearly proven thatcorporate entities have a degree of responsibility towards the peopleand environments that are directly affected by their organizationalresponsibilities. Based on this, the company should recall theproduct and accept to suffer the short-term financial loss so that itcould save its corporate reputation from damage.
InPalmer, D. E. (2015). Handbookof research on business ethics and corporate responsibilities.
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